Juneau -- The Alaska House of Representatives late Friday passed a House Finance Committee Substitute for House Bill 3001, funding Year One of the three-year labor contracts with State government employee unions. The House also passed CSHB 3002, covering unrepresented employees.

"By funding the contracts under the terms of House Bill 3001, as amended by the House, the Republican-led Majority has been able to maintain its goal of reducing State government spending by $30 million dollars in the next fiscal year. We thus fulfilled our five-year Commitment to Alaska to reduce government spending by $250 million over that five-year period," said House Speaker Brian Porter (R-Anchorage). "We were able to do this and avoid possible labor actions, whose costs would have been far in excess of the costs of these increases the Administration negotiated."

The House-passed legislation appropriates just over $19 million to cover employee pay raises in Fiscal Year 2001. The Knowles Administration was able to identify lapsed and reappropriated funds, and non-general funds not fully utilized in FY 2000. The Legislature also appropriated approximately $4.7 million from the Legislative reduction in general fund spending for FY 2001, leaving a general fund reduction of over $33 million.

"Near the end of the regular session of the Legislature, the Majority asked the Governor to find the money to pay for the $19 million in increases he negotiated and, by and large, that's what he and his administration have done," said Representative Eldon Mulder (R-Anchorage), Co-Chair of the House Finance Committee. "Working with the administration, we were able to find $14.3 million in the current year's budget and another $4.7 million from next year's budget, thus funding the contracts while reducing spending by over $33 million for Fiscal Year 2001.

"It's important to remember that the money the we were able to find at the eleventh hour is a combination of federal money and money already appropriated but not yet spent," said Mulder. "Since, during the regular session, the Legislature was actually able to save well in excess of its $30 million goal for next year's budget, we were able to add enough money to fund the first year of the contracts and still meet our $30 million goal. It's a 'win-win situation' in that sense."

"Two points are worth noting," said Speaker Porter. "One is that, while we were able to avoid labor unrest and still achieve our spending reductions, this is only the first year of the three year contract with State employees; the 22nd Alaska Legislature is going to have to determine where the funding for years 2 and 3 is going to come from. The other is that Legislators, themselves, are exempted from any pay increases this year."

HB 3001 passed the House 32-4. HB 3002 passed the House 33-3. Both bills moved to the Senate for consideration.